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Editorial

TRANSITION MEASURES FOR CATALIST NON-SPONSORED COMPANIES

March 2009 - Corporate & Commercial. Legal Developments by Loo & Partners.

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After the launch of Catalist on 26 November 2007 only a handful of Catalist companies had taken steps to appoint a continuing sponsor, whose primary responsibilities comprise the rendering of advice to the Catalist companies on rule compliance.

To address the issue and although the deadline for the appointment of a continuing sponsor for each catalyst company will fall on 5 February 2010 (the "deadline"), the Singapore Exchange Limited (SGX) on 1 September 2008 announced measures to "encourage" as many Catalist Non-Sponsored ("Catalist-NS") companies to appoint continuing sponsors before the deadline. SGX hoped that these measures would promote a smooth transition process.

The transition measures, which came into effect on 1 September 2008, include as follows:

1. Quarterly progress reports on transition plans


Each Catalist-NS company must submit a quarterly progress report to SGX of its transition plans containing, inter alia, a timetable for its search for suitable continuing sponsors, its alternative plans to appointing a continuing sponsor (if any), for instance, undergoing a reverse takeover, effecting a merger & acquisition, or upgrading to the Mainboard. The first report from each Catalist-NS company must be submitted to SGX by 1 November 2008.

2. Apprising its shareholders and the general public

From 1 January 2009, within 45 days after the end of each of the three quarters and 60 days after the end of the financial year, each Catalist-NS company must announce (and update, where appropriate) via SGXNET the information contain in its first report submitted to SGX.


3. Major Corporate Actions

From 1 January 2009, each Catalist-NS company must appoint a continuing sponsor and comply with the Catalist Rules when undertaking major corporate actions, including, any fund raising from its shareholders or the investing public, undertaking any major acquisitions and disposals of assets, entering into any interested person transaction that will require its shareholders’ approval, and entering into any scheme of arrangement.

The transition measures may not yield "quick" results. As most Catalist-NS companies are by definition companies with a low market capitalisation, it would be unlikely that such companies will readily appoint a continuing sponsor before the deadline in view of the high annual costs involved in the appointment of a continuing sponsor, who generally charges within a range of SGD 100,000 and SGD 200,000.

Please visit SGX website (www.sgx.com) for more details.

Loo & Partners LLP mail@loopartners.com.sg 

http://www.loopartners.com.sg

 

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